Problem 19.20 Tomey Supply Company's financial statements for the most recent fiscal year are shown below. The company projects that sales will increase by 15 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 26 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long- term debt. Prepare pro forma financial statements for the coming year based on this information, and calculate the EFN for Tomev. (Round intermediate calculation to the nearest whole dollar, e.g. 5,275. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Tomey Supply Company Income Statement and Balance Sheet Income Statement Balance Sheet Revenues $1,768,121 Assets Costs 1,116,487 Current Assets $280,754 EBT 651,634 Net Fixed Assets 713,655 Taxes (35%) 228,072 Total assets $994,409 Net Income $423,562 Liabilities and Equity: Current Liabilities $167,326 Long-term debt 319,456 Common Stock 200,000 Retained Earnings 307,627 Total liabilities & equity $994,409 Tomey's EFN is

Problem 19.20 Tomey Supply Company's financial statements for the most recent fiscal year are shown below. The company projects that sales will increase by 15 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 26 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long- term debt. Prepare pro forma financial statements for the coming year based on this information, and calculate the EFN for Tomev. (Round intermediate calculation to the nearest whole dollar, e.g. 5,275. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Tomey Supply Company Income Statement and Balance Sheet Income Statement Balance Sheet Revenues $1,768,121 Assets Costs 1,116,487 Current Assets $280,754 EBT 651,634 Net Fixed Assets 713,655 Taxes (35%) 228,072 Total assets $994,409 Net Income $423,562 Liabilities and Equity: Current Liabilities $167,326 Long-term debt 319,456 Common Stock 200,000 Retained Earnings 307,627 Total liabilities & equity $994,409 Tomey's EFN is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Chapter 12, Question 1
Distribution Limited projects sales next year to be $4 million and expects to earn 5% of that amount after taxes. The company is currently in the process of projecting its financial needs and has made the following assumptions (projections): - Current Assets will equal 8% of sales, and fixed assets will remain at their current level of $1million. - Common equity is currently $0.6million (made up entirely of Retained earnings), and the company pays out half of its after-tax earnings in dividends. - The company has short-term payables that normally equal 7% of sales each and it has no long-term debt outstanding. What are the company’s financing needs for the coming year?
AFN equation Broussard Skateboard's sales are expected to increase by 25% from $8.4 million in 2019 to $10.50 million in 2020. Its assets totaled $4 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.
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The most recent financial statements for xyz inc. follow. Sales for 2019 are projected to grow by 22 percent. Interest expense will remain constant, the tax rate and dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued. How much external financing is needed to support the 16 percent growth rate in sales? Income statement 2019 Net sales 17,300 Cost of Goods Sold 10,600 Depreciation 3,250 Earning before interest and taxes 3,450 Interest paid 680 Taxable income 2,770 Taxes 940 Net income…
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Forecast Orwell's additional funds needed (AFN) for next year. Assuming the firm is operating at only 50% of capacity and using the data in the table below, forecast Orwell's AFN for the coming year? Current Assets may be considered negligible. Last year's sales = S0 $164,000 Last year's accounts payable $40,000 Sales growth (ΔS) $46,000 Last year's notes payable $10,000 Last year's total assets = A0* $268,000 Last year's accruals $10,000 Last year's profit margin = PM 0.00 Target payout ratio 0.1
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Quantitative Problem 1: Beasley Industries' sales are expected to increase from $4 million in 2017 to $5 million in 2018, or by 25%. Its assets totaled $2 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $720,000, consisting of $140,000 of accounts payable, $350,000 of notes payable, and $230,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 50%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest dollar